Startup has ultrasound alternative to NFC

SAN JOSE, Calif. – Startup Naratte Inc. has disclosed a technique for sending information via ultrasound using existing speakers and microphones in consumer devices such as smartphones. It is working with partners to enable applications such as mobile payments.

The startup's technology called Zoosh is positioned as an alternative to near field communications, particularly good for enabling via a mobile app existing systems that do not support NFC.

A company called SparkBase is already using the technology for a mobile wallet application called PayCloud. Other applications in the works include phone-to-phone and phone-to-POS payments, phone-to-POS loyalty systems, digital coupons and fast Bluetooth pairing.

The company is currently focused on closed, single company applications such as loyalty and gift cards. As it demonstrates success, it hopes eventually to attract the interest of banks and credit card companies now lining up to support NFC.

"We need to prove our technology across different apps and then the [open] transactions will come," said Brett Paulson, co-founder and chief executive. "We know NFC is coming, but there is always room for another short range wireless system," he said.

Paulson said the technology can enable NFC like apps in existing phones that lack an NFC chip or new handsets that do not want to take on the added hardware cost of NFC.

The approach uses audio frequencies inaudible to humans, created using proprietary transforms and algorithms created by Naratte (pronounced to rhyme with karate). The audio is played as a standard MP3 file over a limited distance using a unique and perishable transaction ID.

The startup has designed a $30 docking station that plugs into some existing point of sale terminal to enable audio capture and decoding. Many POS terminals are based on PC-like motherboards that support audio and only need a $2 speaker/mic adapter, Paulson said.

The company focuses on supporting distances of about six inches for transactions that typically require a thousand bits, but notes that longer distances can be supported depending on the particulars of existing hardware which varies widely. The company has tested about 50 phones so far and has not found audio frequency response an issue for any handset that can support MP3 playback.

Naratte is adopting a flexible business model to align with its customers. Thus it charges either a one-time licensing fee or a per-transaction royalty.

The startup faces a host of challenges. It must convince third parties to adopt its technology at a time when many of the big banks, credit card companies and mobile giants are jumping on NFC.

Potential partners will scrutinize closely any security scheme used for payments. To succeed, Naratte will have to build its own ecosystem and likely create at least a de facto standard around its technology.

To its credit, Naratte gathered general statements of support from a handful of influential people.

"Zoosh has the potential to enable complete consumer merchant shopping experiences," said Laura Chambers, general manager of PayPal Mobile, noting the low cost of deploying the technology.

"This is one of the most creative uses of [wireless] technology that I've seen," said Matt Muse, general manager of C5000 DSPs at Texas Instruments.

"Being able to easily enable transactions among all types of mobile devices within the true proximity from each other, all done through a pure software-based solution, is incredibly powerful," said Fay Arjomandi, head of US R&D for Vodafone Group.

Naratte (Sunnyvale, Calif.), was founded in May 2009 and has 12 employees. It received $5 million in funding from an unnamed investor and has eight patents pending. It has posted a demo online.

This sounds like breaking news since the trademark for "Zoosh" was only registered on Feb. 1, 2011 and the patent applications have yet to be published (meaning they were filed after Dec. 21, 2009). I wonder if children (with better high frequency hearing that adults) will be annoyed by these high frequency short distance communications. Certainly the sounds are in the audible range of humans - and need to stay within the operating frequencies of the telecommunications devices.

Just on the surface, it appears to be an easy target for hackers, how hard can it be to rig devices for audio capture and playback of captured data streams?
It makes me wonder how strong and tamper-proof could be an audio-based encoding, in order to prevent hacking? Since the user-tolerable transaction times may place limits on packet size and the encoding-rates required.

It's better because with a simple app download all the older smartphones could support it without waiting for a 2-3 yr refresh cycle. Downside... it's probably not as reliable and you'd also have irate customers waiting in line behind someone that can't complete his transaction because he's forgotten his phone is on silent or the volume is set too low.

What an interesting story. It really sounds like a very powerful idea. But since this is a very innovative approach, I bet it will be filled with questions and a very cautious approack from the big banks and some other companies seeking security.
One question that pops on mind is... if they are using the mobile phone's already built-in speakers and mics wouldn't using such devices under such abnormal frequencies reduce the 'life' of the devices? what is Naratte going to answer that question? I'd be interested to know that since one thing is to test for functionality but other is to test for durability and perhaps they even should since in the future, somebody could sue them saying they are the cause for their phone failure... well, that is of course if they make a good license freeing them from all responsability. And then... would you use such "at you're own risk" scheme?

This is an important point. Transaction support is a very "top-heavy" application which includes authentication, encryption, errorproofing, etc. Whether that happens over RF or audio physical transport would seem to be a relatively minor detail.
Larry M.